Abstract:
As important institutional investors, whether insurance companies' shareholding can stabilize markets and improve corporate governance of listed companies is a topic of common concern in academic and practical circles. Using Shanghai and Shenzhen A-share listed companies as samples, this paper empirically examines the impact of insurance investment shareholding on stock market manipulation. The research finds that insurance investment shareholding can significantly suppress stock market manipulation, a finding that remains valid after a series of endogeneity treatments and robustness tests. Mechanism tests indicate that: first, insurance investors have higher requirements for corporate information disclosure, which helps reduce market information asymmetry and decreases the possibility of market manipulation; second, insurance investors can strengthen supervision of corporate operations, financial transactions, and internal controls, compelling companies to incorporate more forward-looking and standardized requirements into their governance structures, significantly improving corporate governance and effectively suppressing stock market manipulation; third, insurance investment shareholding can reduce short-term impacts of market floating shares, helping stock prices quickly return to the company's intrinsic value, enhancing the depth and elasticity of stock trading, and reducing opportunities for stock market manipulation. Further analysis shows that in non-state-owned and large-scale enterprises, insurance investors can better play supervisory and governance roles; in companies audited by the Big Four, high-quality information environments lay the foundation for insurance investors to exert their influence, thereby better suppressing market manipulation in these companies. Compared to public funds, insurance investment has longer holding periods, places more emphasis on company transparency and compliance when selecting stocks, and typically deeply engages in corporate governance through methods such as appointing directors and participating in shareholders' meetings, thus better suppressing stock market manipulation. This paper enriches the literature on the impact of insurance investment shareholding on capital markets and provides empirical support for actively guiding long-term funds into the market.
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